Looks like Canada was a good place to pick as the venue

for the first Fidessa Fragmentation Forum of 2011. Around 140

representatives from Canada's financial community

gathered together at the

href="http://www.tmx.com/en/index.html"

target="_blank">Toronto Stock Exchange's

HQ in Toronto to discuss fragmentation and Canada's role in

global financial markets. Naturally, much of the discussion

focused on the

href="http://www.londonstockexchangegroup.com/newsroom/2011pressreleases/tmxandlsegjoinforces.htm"

target="_blank">news of a merger between the LSE and the

TSX and its implications for the market as a

whole.

The charts below show the extent to

which the

href="http://www.londonstockexchange.com/home/homepage.htm"

target="_blank">LSE and the

href="http://www.tmx.com/en/index.html"

target="_blank">TSX have both witnessed considerable

fragmentation of their domestic liquidity and this has probably

led both exchanges to be much more amenable to the strategic

tie-up announced on Wednesday.

href="http://fragmentation.fidessa.com/wp-content/uploads/FTSE100_alternative3.png"> class="aligncenter size-full wp-image-2292"

src="http://fragmentation.fidessa.com/wp-content/uploads/FTSE100_alternative3.png"

alt="" width="576" height="319" />

href="http://fragmentation.fidessa.com/wp-content/uploads/TSX60_alternative3.png"> class="aligncenter size-full wp-image-2293"

src="http://fragmentation.fidessa.com/wp-content/uploads/TSX60_alternative3.png"

alt="" width="577" height="319" />

A similar

href="http://deutsche-boerse.com/dbag/dispatch/en/notescontent/gdb_navigation/home/INTEGRATE/mr_pressreleases?notesDoc=D7FD336191ED7CBDC1257832006391C3&newstitle=deutscheboerseagandnyseeuronex&location=home"

target="_blank">announcement by Deutsche Börse and NYSE

Euronext this week also illustrates how primary

exchanges are entering a new phase in their war against the

alternative community. Rather than trying to

href="http://fragmentation.fidessa.com/2011/02/08/the-sound-of-the-drums-%E2%80%93-8-february-2011/"

target="_blank">take them on at their own game, the

big guys have worked out that maybe the best plan is just to get

even bigger. It's ironic that, in their bid to break up

the monopolies of the national operators, the regulators are

actually having the opposite effect and creating global ones

instead.

By a bizarre coincidence, our Sydney

Fragmentation Forum last year coincided with a similar

href="http://www.asxgroup.com.au/media/PDFs/20101025_asx_sgx_media_release.pdf"

target="_blank">merger announcement between SGX and

ASX. Both of these announcements raised

the issue of whether these mergers are fully in the "national

interests" of the countries whose exchanges are being acquired.

The simple fact is, however, that the concept of a national stock

exchange died when the regulators first started to put pen to

paper.

I imagine that the CEOs of other

national exchanges are watching these events carefully and

pondering the fact that, in the venue space, you've either got to

be really niche and focused or simply huge.

Let me know what you think and we'll share the

results next week.

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Anyway, looking forward to the next

Fragmentation Forum and what further announcements it may

foreshadow!